The Ethical Trading Initiative

Definition

The Ethical Trading Initiative (ETI) is a multi-stakeholder initiative that promotes respect for workers' rights and sustainable practices in global supply chains. It connects businesses, trade unions, and non-governmental organizations to create a common framework for ethical trade, emphasizing fair labor practices and improving working conditions in supplier factories.

5 Must Know Facts For Your Next Test

1. ETI was founded in 1998 and has grown to include over 100 organizations across various sectors committed to ethical trading practices.
2. Members of ETI are expected to adhere to the ETI Base Code, which outlines key principles such as the prohibition of child labor, forced labor, and discrimination in the workplace.
3. The initiative provides training and resources to help businesses implement ethical trading practices effectively within their supply chains.
4. ETI emphasizes collaboration among stakeholders, including brands, retailers, suppliers, and workers, to address systemic issues in global supply chains.
5. By promoting ethical trade, ETI aims to improve not only worker rights but also overall business sustainability by fostering fairer practices within industries.

Review Questions

• How does the Ethical Trading Initiative influence businesses in their supply chain management?
  • The Ethical Trading Initiative influences businesses by providing a framework for ethical practices that must be integrated into supply chain management. By adhering to the ETI Base Code, companies commit to respecting workers' rights and ensuring fair labor conditions. This helps businesses mitigate risks related to labor exploitation and enhance their brand reputation among consumers who prioritize ethical standards.
• In what ways does the Ethical Trading Initiative promote collaboration among different stakeholders in supply chains?
  • The Ethical Trading Initiative promotes collaboration by bringing together businesses, trade unions, NGOs, and other stakeholders to work towards common goals. Through shared resources, training programs, and collective advocacy efforts, these stakeholders can address systemic issues affecting workers’ rights. This collaborative approach helps build trust and fosters a culture of accountability within global supply chains.
• Evaluate the impact of the Ethical Trading Initiative on global supply chains and worker rights over the last two decades.
  • Over the last two decades, the Ethical Trading Initiative has significantly impacted global supply chains by raising awareness about worker rights and advocating for ethical trading practices. Its influence has led many companies to adopt more responsible sourcing strategies, resulting in improved labor conditions for workers in various industries. By fostering collaboration among stakeholders, ETI has also contributed to establishing benchmarks for ethical behavior in supply chains, which encourages continuous improvement and accountability among businesses.

Related terms

Fair Trade: A movement that seeks to provide fair wages and ethical working conditions for producers in developing countries, ensuring that they receive a fair share of the profits.

Supply Chain Transparency: The practice of openly sharing information about the various stages of production and distribution, allowing consumers and stakeholders to understand the sources and practices involved in the supply chain.

Corporate Social Responsibility (CSR): A business model in which companies integrate social and environmental concerns into their operations and stakeholder interactions, aiming for a positive impact on society.